Business Name : Intero Capital Solutions LLC
Current AUM : N/A
$ Volume of Transactions Completed Last 12 months : 2021: USD 71,000,000
$ Volume of Transactions completed by Founding Team: circa USD 2,000,000,000
Target Launch Date : 30 June 2022
Location and Team Size : USA / UK, 7
Years in Operation : Intero Capital Solutions: 1 year
Founding team: 5 years
Historical Loan Tape (years) : 9 years
Key Professional Partners :
Legal: Lindabury, McCormick, Estabrook & Cooper, P.C. (Intero Trading)
Accounting: Guillen Pujol CPA (Intero Capital Solutions)
Operational: Wired Back Ltd (Re-Insurance)
Operational: Citadel SPV LLC (Issuer Governance)
Intero Capital Solutions LLC (“ICS”) is a provider of working capital solutions with a primary focus on supply chain finance. Our primary offering, a Buyer-led accounts payable solution, delivers a flexible solution for our Clients/Buyers, enabling early supplier settlement to unlock working capital within their supply chain. The focus on Buyer-led, as opposed to Supplier-led, solutions allows us to develop a deep understanding of the Buyer’s business and the opportunities that additional working capital may deliver to their organisation, whilst simultaneously derisking our funding solutions by selecting Clients with strong credit profiles.
The facilities offered to our Buyers revolve on a rolling basis, generally every 90-120 days, providing the community with ongoing opportunity to participate within the liquidity pools deployed on Centrifuge. Our focus on originating high quality, risk-mitigated assets from various sectors and jurisdictions will further diversify the opportunities currently presented to the investment community on Tinlake, helping to improve the overall resilience of the DeFi ecosystem in which Centrifuge operates.
By providing DeFi liquidity to real world borrowers through flexible working capital solutions and combining them with Traditional Finance (“TradFi”) mechanisms which we have confidently utilised previously, such as credit insurance, we are uniquely positioned within the market to serve the borrower, the lender, and the DeFi ecosystem while not compromising on the quality of the assets being originated into the liquidity pool funding mechanisms.
ICS has raised sufficient equity investment to develop its product offering with additional debt and/or equity to be raised if needed. Our income is derived through a Service Level Agreement (SLA) with Intero Trading LLC (“ITR”), the independent asset originator for the liquidity pool, incentivizing ICS to deliver quality origination, risk management, and back-office solutions for ITR. ICS has an initial focus on originating facilities between USD 750,000 and USD 5,000,000 with an annual cost to the Buyer of between 12% and 20%. Larger facilities at lower rates are also considered and are assessed on a case-by-case basis.
ITR has sourced direct investment for the junior tranche (TIN) of circa USD 1,500,000 to date with a target of USD 5,000,000 in the medium term as a combination of debt and equity. This capital is sourced from high net-worth individuals and institutions seeking non-market correlated returns. These investors have also been invited to participate in the senior tranche (DROP) depending on their individual risk mandates and appetites. Our investor network continues to grow as we build out the product offering and move closer to the launch date of the liquidity pool.
Our approach to DeFi is based on our belief that the current TradFi markets and products could benefit from the efficiencies and opportunities created by the rapid advances seen within the blockchain and cryptocurrencies industry. Similarly, by providing quality asset origination, borrowers currently served by TradFi can enhance the DeFi ecosystem through diversification of the asset collateral currently offered to investors. Centrifuge provides the platform on which these two marketplaces can be effectively combined and the benefits for both realised in a professional environment that is simple and intuitive to use.
ICS is structured to decentralise its risk decision making through its relationship with ITR by inviting its equity investors to participate in credit committee assessments. This collaboration gives representation to those entrusting ICS to deliver on its mandate and strengthens the objective and subjective assessments performed on the originated assets. While different in structure, this echoes the sentiment of the Centrifuge community and its move towards becoming a DAO. The recent developments of the Centrifuge protocol, notably securing a parachain on the Polkadot network, confirm to ICS that Centrifuge is a forward-looking community with significant ambition and provides a solid foundation for ICS to deploy its solutions and scale up over the coming years.
Structure: Risk & Terms
The key risk associated with the ICS offering is credit risk. ICS has developed a comprehensive credit risk management policy to address the following areas:
- Establishing an appropriate credit risk environment.
- Managing the credit activities of ICS using prudent credit criteria.
- Maintaining an appropriate credit administration, measurement, and monitoring process.
- Clearly defining the roles and responsibilities of the different parties within ICS.
- Reviewing all significant exposures on an ongoing basis.
- Overall review of ICS’s Buyer portfolio on a regular basis.
- Overseeing ICS’s reputational risk.
- Credit Insurance used to protect the funds deployed when applicable.
- Regular and ongoing Buyer assessment.
- Various forms of collateral (entity and/or individual level).
Pool Size & Pipeline:
At Launch: USD 10 million
6 Months after Launch: USD 20 million
12 Months after Launch: USD 40 million
Origination Pipeline Details: Based on existing relationships with Buyers and a deep global professional network ably feeding ICS’s new Buyer pipeline.
Asset & Rates:
Asset Type(s): Trade receivables
Average Ticket Size: USD 400,000
Average Asset Maturity: 120 days
Expect Default Rate: < 1%
Expected borrowing rate on senior tranche (on-chain): 4% - 6%
Expected lending rate to end borrower (off-chain): 12% - 20%